Archive for the ‘Bonny Island Bribery’ Category

Friday Roundup

Friday, April 4th, 2014

Contorted, interesting, deserving?, scrutiny alerts and updates, and for the reading stack.  It’s all here in the Friday Roundup.

Contorted

One of the most contorted words in the FCPA vocabulary is “declination” (see here among other posts).

This K&L Gates report contains a useful summary of DOJ and SEC comments at a recent conference.  It states:

“Mr. Knox [DOJ Criminal Division Fraud Section Chief] stated that companies continue to request specific information regarding the Department’s declinations, but that it is the Department’s long-standing practice not to publish details of declinations without a company’s permission, which is rarely given.  According to Mr. Knox, however, over the last two years, the Department has declined to prosecute dozens of cases.  Notably, Mr. Knox stated that, aside from finding no evidence of criminal conduct, the Department may issue a declination when a case involves an isolated incident, the company had a strong compliance program, and the problem was remediated.”

Newsflash.

If the DOJ does not find evidence of criminal conduct and therefore does not bring a case, this is not a “declination,” it is what the law commands.

On the topic of voluntary disclosure, the K&L Gates report states:

“Mr. Cain [SEC FCPA Unit Deputy Chief] started by stating “there is no perfect compliance program;” therefore, companies will always have some “background issues” which need to be addressed, especially as business and risk profiles change.  Mr. Cain does not expect companies to disclose these “normative” problems; however, companies should disclose “significant problems.”  These “significant problems” are the types of issues which may end up being enforcement actions if the SEC learns of them through means other than self-disclosure.”

“Mr. Knox took the position that it would be “very reckless and foolish” for him “to try and draw a line between matters which should be self-disclosed and matters which shouldn’t.”  In making the decision of whether to self-disclose, he advised companies and counsel to apply “common sense” and ask whether this is “something that [the Department] would be interested in hearing about?”  According to Mr. Knox, if the answer to that question is “yes,” then the Department would “probably want [a company] to self-disclose it.”  Nonetheless, there are instances which are not worthy of self-disclosure because the conduct is “minor” and “isolated” or the allegation of wrongdoing is “much too vague.”  Mr. Knox advised companies to “be thoughtful” when making disclosure decisions and carefully document any decision not to disclose.”

If the above leaves you scratching your head, join the club.

Interesting

My article “Why You Should Be Alarmed by the ADM FCPA Enforcement Action” highlights how ADM and its shareholders were victims of a corrupt Ukrainian government in that the government refused to give ADM something even the DOJ and SEC acknowledged ADM was owed – VAT refunds.  Among other things, the article discusses how VAT refund refusals were well-known and frequently criticized prior to the ADM enforcement action in late 2013.

Fast forward to the present day and VAT refund refusals remain a problem in Ukraine.  Recently the International Monetary Fund issued this release concerning a potential aid package for Ukraine.  Among the conditions is that Ukraine  adopt “reforms to strengthen governance, enhance transparency, and improve the business climate” such as taking “measures to facilitate VAT refunds to businesses.”

Deserving?

Earlier this week, the African Development Bank Group (AfDB) released this statement

“Kellogg Brown & Root LLC, Technip S.A. and JGC Corp. agree to pay the equivalent of US $17 million in financial penalties as part of Negotiated Resolution Agreements with the African Development Bank following admission of corrupt practices by affiliated companies in relation to the award of services contracts for liquefied natural gas production plants on Bonny Island, Nigeria, from 1995 until 2004.”

The Director of the AfDB’s Integrity and Anti-Corruption Department stated:

“This settlement demonstrates a strong commitment from the African Development Bank to ensure that development funds are used for their intended purpose.  At the same time, it is a clear signal to multinational companies that corrupt practices in Bank-financed projects will be aggressively investigated and severely sanctioned. These ground-breaking Negotiated Resolution Agreements substantially advance the Bank’s anti-corruption and governance agenda, a strategic priority of our institution.”

Pardon me for interrupting this feel good moment (i.e. a corporation paying money to a development bank), but why is AfDB deserving of any money from the companies?  As noted here, AfDB’s role in the Bonny Island project was relatively minor as numerous banks provided financing in connection with the project.  Moreover, as noted here, the AfDB “invested in the oil and gas sector through a USD 100 million loan to NLNG [Nigeria LNG Limited] to finance the expansion of a gas liquefaction plant located on Bonny Island.”

As alleged in the U.S. Bonny Island FCPA enforcement actions, the above-mentioned companies allegedly made corrupt payments to, among others, NLNG officials.  And for this, the specific companies paid $579 million (KBR, et al), $338 million Technip, and $219 million (JGC).

Why is the bank that loaned money to NLNG deserving of anything?  Is there any evidence to suggest that the $100 million given to NLNG was not used for its “intended purpose” of building the Bonny Island project?

Scrutiny Alerts and Updates

SBM Offshore, Sweett Group, Citigroup, Cisco, and Societe Generale.

SBM Offshore

The Netherlands-based company (with ADRs traded in the U.S. that provides floating production solutions to the offshore energy industry) has been under FCPA scrutiny for approximately two years.  It recently issued this statement which states, in summary, as follows.

“SBM Offshore presents the findings of its internal investigation, which it started in the first quarter of 2012, as the investigators have completed their investigative activities. The investigation, which was carried out by independent external counsel and forensic accountants, focused on the use of agents over the period 2007 through 2011. In summary, the main findings are:

  • The Company paid approximately US$200 million in commissions to agents during that period of which the majority relate to three countries: US$18.8 million to Equatorial Guinea, US$22.7 million to Angola and US$139.1 million to Brazil;
  • In respect of Angola and Equatorial Guinea there is some evidence that payments may have been made directly or indirectly to government officials;
  • In respect of Brazil there were certain red flags but the investigation did not find any credible evidence that the Company or the Company’s agent made improper payments to government officials (including state company employees). Rather, the agent provided substantial and legitimate services in a market which is by far the largest for the Company;
  • The Company voluntarily reported its internal investigation to the Dutch Openbaar Ministerie and the US Department of Justice in April 2012. It is presently discussing the disclosure of its definitive findings with the Openbaar Ministerie, whilst simultaneously continuing its engagement with the US Department of Justice. New information could surface in the context of the review by these authorities or otherwise which has not come up in the internal investigation to date;
  • At this time, the Company is still not in a position to estimate the ultimate consequences, financial or otherwise, if any, of that review;
  • Since its appointment in the course of 2012 the Company’s new Management Board has taken extensive remedial measures in respect of people, procedures, compliance programs and organization in order to prevent any potential violations of applicable anti-corruption laws and regulations. Both it and the Company’s Supervisory Board remain committed to the Company conducting its business activities in an honest, ethical, respectful and professional manner.”

The SBM Offshore release contains a detailed description of the scope and methodology of its review, as well as remedial measures the company has undertaken.  For this reason, the full release is an instructive read.

Sweett Group

As noted in this prior post, in June 2013 Sweett Group Ltd. (a U.K. based construction company) was the subject of a Wall Street Journal article titled “Inside U.S. Firm’s Bribery Probe.” The focus of the article concerned the construction of a hospital in Morocco and allegations that the company would get the contract if money was paid to “an official inside the United Arab Emirates President’s personal foundation, which was funding the project.”

Earlier this week, the company issued this release which stated:

“[T]here have been further discussions with the Serious Fraud Office (SFO) in the UK and initial discussions with the Department of Justice (DOJ) in the USA.  The Group is cooperating with both bodies and no proceedings have so far been issued by either of them.  The Group has commissioned a further independent investigation which is being undertaken on its behalf by Mayer Brown LLP.  Whilst this investigation is at an early stage and is ongoing, to date still no conclusive evidence to support the original allegation has been found.  However, evidence has come to light that suggests that material instances of deception may have been perpetrated by a former employee or employees of the Group during the period 2009 – 2011.  These findings are being investigated further.”

Citigroup

When first discussing Citigroup’s “FCPA scrutiny” I noted the importance of understanding that the FCPA contains generic books and records and internal controls provisions that can be implicated in the absence of any FCPA anti-bribery issues. (See here for a prior post on this subject).  As highlighted in this recent New York Times Dealbook article, this appears to be what Citigroup’s scrutiny involves.  According to the article:

“Federal authorities have opened a criminal investigation into a recent $400 million fraud involving Citigroup’s Mexican unit, according to people briefed on the matter …  The investigation, overseen by the FBI and prosecutors from the United States attorney’s office in Manhattan, is focusing in part on whether holes in the bank’s internal controls contributed to the fraud in Mexico. The question for investigators is whether Citigroup — as other banks have been accused of doing in the context of money laundering — ignored warning signs.”

Cisco

BuzzFeed goes in-depth as to Cisco’s alleged conduct in Russia that has resulted in FCPA scrutiny for the company. The article states, in pertinent part:

“[T]he iconic American firm is facing a federal investigation for possible bribery violations on a massive scale in Russia. At the heart of the probe by the Department of Justice and the Securities and Exchange Commission, sources tell BuzzFeed, are allegations that for years Cisco, after selling billions of dollars worth of routers, communications equipment, and networks to Russian companies and government entities, routed what may have amounted to tens of millions of dollars to offshore havens including Cyprus, Tortola, and Bermuda.”

“Two former Cisco insiders have described to BuzzFeed what they say was an elaborate kickback scheme that used intermediary companies and went on until 2011. And, they said, Cisco employees deliberately looked the other way.”

“No one is suggesting that Cisco bribed Russia’s top leaders. Instead, the investigation is centered on day-to-day kickbacks to officials who ran or helped run major state agencies or companies. Such kickbacks, according to the allegations, enabled the firm to dominate Russia’s market for IT infrastructure.”

“Last year, according to sources close to the investigation, a whistleblower came forward to the SEC, sketching out a vast otkat [kickback] scheme and providing documents as evidence.”

“The two former Cisco executives laid out for BuzzFeed how the alleged scheme worked:  In Cisco’s Russia operations, funds for kickbacks were built into the large discounts Cisco gave certain middleman distributors that were well-connected in Russia. The size of the discounts are head-turning, usually 35% to 40%, but sometimes as high as 68% percent off the list price.  And there was a catch: Instead of discounting equipment in the normal way, by lowering the price, parts of the discounts were often structured as rebates: Cisco sent money back to the middlemen after a sale. Some intermediaries were so close to the Russian companies and government agencies — Cisco’s end customers — that these intermediaries functioned as their agents. These middleman companies would direct the rebate money to be sent to bank accounts in offshore havens such as Cyprus, the British Virgin Islands, or Bermuda.”

According to the article, WilmerHale is conducting the internal investigation.

Societe Generale

Like other financial services company, Societe Generale has come under FCPA scrutiny for business dealings in Libya.  (See here for the prior post).  As noted in this recent article in the Wall Street Journal, in a U.K. lawsuit the Libyan Investment Authority has alleged that the company “paid a middleman $58 million in alleged bribes to secure almost $2 billion in business … during the final years of dictator Moammar Gadhafi’s rule.”

Reading Stack

The most recent issue of the always informative FCPA Update from Debevoise & Plimpton contains a useful analysis of the DOJ’s recent opinion procedure release (see here for the prior post).  Among other things, the Update states:

“[W]hy did it take eight months for the DOJ to issue an Opinion which could have simply cited [a prior Opinion Release]? The delay does not appear to be related to the DOJ’s heavy workload or bureaucratic inertia, as “significant backup documentation” was provided and “several follow up discussions” took place during the eight months.”

*****

A good weekend to all.  On Wisconsin!

Keeping FCPA Enforcement Statistics In Perspective

Wednesday, January 23rd, 2013

The below chart provides a summary of corporate FCPA enforcement data (DOJ and SEC combined) for the years 2007-2012, as well as notable circumstances that significantly skewed enforcement data statistics for a particular year.  (The below data was assembled using the “core” approach – see this prior post for an explanation).

Corporate FCPA Enforcement Actions (2007-2012)

Year

Enforcement Actions

Settlement Amounts

Of Note

2007

15

$149 million

Six   enforcement actions involved Iraq Oil for Food conduct and these enforcement actions comprised 40% of all enforcement actions and approximately 50% of the $149 million amount.

2008

10

$885 million

The   $800 million Siemens enforcement action comprised approximately 90% of the $885 million amount.

2009

11

$645 million

The   $579 million KBR / Halliburton Bonny Island, Nigeria enforcement action comprised approximately 90% of the $645 million amount.

2010

21

$1.4 billion

Six   enforcement actions, all resolved on the same day, centered on various oil   and gas companies use Panalpina in Nigeria.  Panalpina also resolved an enforcement action on the same day.Two enforcement actions (Technip and Eni / Snamprogetti) involved Bonny Island conduct.  In other words, there were 14 unique corporate enforcement actions in 2010.  Of further note, the two Bonny Island enforcement actions, Technip($338 million) and Eni/Snamprogetti ($365 million) comprised approximately 50% of the $1.4 billion amount.

2011

16

$503 million

The   $219 million JGC Corp. Bonny Island, Nigeria enforcement action comprised approximately 44% of the $503 million amount

2012

12

$260 million

None that significantly skewed the statistics.
TOTAL: 85 TOTAL: $3.9 billion

As demonstrated by the above chart, 2010 was the apex of FCPA enforcement, both in terms of the number of enforcement actions and settlement amounts.  FCPA enforcement in 2012 was less than in 2011, and FCPA enforcement in 2011 was less than in 2010.

Industry participants have offered various reasons for the decrease in FCPA enforcement in 2012 – all speculative and not empirically based.

What is not speculative and what is empirically based is an analysis of how just a few unique historical events had a significant impact on FCPA enforcement data between 2007 and 2011 and how these events place 2012 FCPA enforcement data in a proper context.

The events, as suggested by the above chart, are the following: (i) publication in 2005 of the so-called Volcker Report on the United Nations Iraq Oil for Food Program which served as a ready-made list of enforcement actions; (ii) in 2003 Georges Krammer, a former top official at Technip, shared information with French investigators concerning a $6 billion dollar project at Bonny Island, Nigeria; and (iii) several oil and gas companies utilized the services of Panalpina.

As indicated in the below charts, these unique historical events had a significant impact on FCPA enforcement data between 2007 and 2011.

Corporate FCPA Enforcement Actions Based on Iraq Oil For Food Conduct (2007-2011)

Enforcement Actions

Total Enforcement Action Percentage

 

Settlement Amounts

Total Settlement Amount Percentage

14

19%

$267 million

7%

Corporate Bonny Island, Nigeria FCPA Enforcement Actions (2007-2011)

Enforcement Actions

Total Enforcement Action Percentage

 

Settlement Amounts

Total Settlement Amount Percentage

4

5%

$1.5 billion

41%

Corporate Panalpina Related FCPA Enforcement Actions (2007-2011)

Enforcement Actions

Total Enforcement Action Percentage

 

Settlement Amounts

Total Settlement Amount Percentage

8

11%

$262 million

7%

As demonstrated by the above charts, the combined effect of just three unique historical events –  Iraq Oil for Food, Bonny Island conduct, and use of Panalpina – had a significant impact on FCPA enforcement data between 2007 and 2011.  These events served as the foundation for 35% of all corporate enforcement actions between 2007-2011 and resulted in 55% of the settlement amounts in corporate enforcement actions between 2007-2011.

Adding just the 2008 Siemens enforcement action to the settlement amount calculation, results in just four unique historical events accounting for 77% of settlement amounts in corporate enforcement actions between 2007-2011.

While the January 2012 FCPA enforcement action against Marubeni did involve Bonny Island conduct, the unique events identified above have run their course.  Recognizing these events and how they impacted FCPA enforcement data is important to understanding why FCPA enforcement has declined in recent years.

Even though FCPA enforcement has declined in recent years, unique events giving rise to FCPA enforcement actions have remained relatively constant between 2007 and 2012.  In 2007, corporate FCPA enforcement actions were the result of 15 unique events.  In 2008, corporate FCPA enforcement actions were the result of 10 unique events.  In 2009, corporate FCPA enforcement actions were the result of 11 unique events.  In 2010, corporate FCPA enforcement actions were the result of 14 unique events.  In 2011, corporate FCPA enforcement actions were the result of 16 unique events.  In 2012, corporate FCPA enforcement actions were the result of 12 unique events.

Inside FCPA Enforcement Statistics

Wednesday, July 18th, 2012

FCPA Inc., it often seems, is obsessed with enforcement statistics.  Increasing FCPA enforcement, and the ability to demonstrate it through numbers and graphs, is an effective marketing device for many in the industry.  But what happens when enforcement actually decreases?  How do you market decreasing FCPA enforcement?  As Michael Volkov recently stated (here) on his Corruption, Crime and Compliance site  “law firms are wringing their hands wondering how they can ‘scare’ businesses with the latest FCPA enforcement action.”  It seems the answer is to speculate as to possible reasons for the decrease and remind your marketing targets of the many cases in the “pipeline.”

The decrease in FCPA enforcement has been a hot topic of late, for instance see here from the FCPA Blog.

Let me share a not-so-secret, secret and that is this.  FCPA enforcement 2007-2011 was, to a great extent, the function of just three unique events:  (1) publication in 2005 of the so-called Volcker Report on the United Nations Iraq Oil for Food Program which served as a ready-made list of enforcement actions; (2) in 2003 Georges Krammer, a former top official at Technip, shared information with French investigators concerning a $6 billion dollar project at Bonny Island, Nigeria; and (3) several oil and gas companies utilized the services of Panalpina.

These three unique events have resulted in approximately 35% of the core corporate FCPA enforcement actions between 2007-2011.

There have been 14 core corporate enforcement actions focused on Iraq Oil for Food conduct (Chevron, Azko Nobel, El Paso, Novo Nordisk, AGCO, ABB, Innospec, Ingersall-Rand, Textron, York, AB Volvo, Flowserve, General Electric and Fiat).  Siemens and Daimler also included Iraq Oil for Food conduct, but such conduct was a minor focus of the overall allegations and thus not included in the above figure.  In short, the Iraqi Oil for Food enforcement actions have largely run their course (one of the few remaining inquiries would seem to be Weatherford International where the conduct under investigation includes Iraq Oil for Food conduct).  [Note:  most of the Iraq Oil for Food enforcement actions involved "only" FCPA books and records and internal control charges given that the kickback payments were to the Iraqi government, not a particular foreign official.  Nevertheless such actions are usually included in FCPA enforcement statistics].

There have been 7 core corporate enforcement actions concerning oil and gas companies utilizing the services of Panalpina in Nigeria (Panalpina, Noble, Pride, Shell, Tidewater, Transocean, and Global SantaFe).  These actions, all announced in November 2010, largely account for the spike in 2010 corporate FCPA enforcement.

There have been 4 core corporate enforcement actions concerning the so-called TSKJ joint venture in relation to Bonny Island, Nigeria conduct (KBR / Halliburton, Technip, ENI/Snamprogetti, and JGC Corp.) [Throw in the 2012 enforcement action against Marunbeni and the number is 5].  These enforcement actions of course have not been mere garden-variety types; rather Bonny Island enforcement actions have resulted in 4 of the top 6 FCPA enforcement actions of all time.

Add these numbers together and you find that 25 of the 73 core corporate enforcement actions between 2007-2011 were the direct result of just three unique events.

Viewing FCPA enforcement statistics in the abstract is not a very useful exercise.  Rather, the more thoughtful way to view such statistics is to understand the root causes leading to the enforcement actions in the first place.  When viewed in this way, the not-so-secret, secret is that approximately 35% of FCPA enforcement actions between 2007-2011 were the direct result of just three unique events.  These events have largely run their course and I submit this is the biggest reason why enforcement actions in 2012 are not on pace with the past few years.

[Note - as discussed in previous posts, unlike some others, I keep my corporate FCPA statistics using the “core” approach.  Thus, for instance, the Siemens  enforcement action was 1 ”core” enforcement action even if the DOJ entered into separate agreements with Siemens AG, Siemens Argentina, Siemens Bangladesh, and Siemens Venezuela and even if the SEC separately brought an enforcement action against Siemens AG.  I submit that counting Siemens as 5 corporate enforcement actions, as many do, results in misleading FCPA enforcement statistics.  Further distorting FCPA enforcement statistics is separately counting related individual enforcement actions.  For instance, if one took such an approach in connection with Siemens the end result would be 20 enforcement actions - even though all enforcement actions were based on the same core set of conduct].

Testing Innocence

Monday, February 27th, 2012

By now you have probably heard that various Bonny Island bribery defendants were sentenced last week.  As noted in this DOJ release:

Albert Stanley (a former chairman and CEO of Kellogg, Brown & Root, Inc.) was sentenced to 30 months in prison, ordered to serve three years of supervised release and to pay $10.8 million in restitution to KBR, the victim of a separate kickback scheme Stanley engaged in;

Jeffrey Tesler (a U.K. citizen and agent of the TSKJ joint venture at the center of the bribery scheme) was sentenced to 21 months in prison, followed by two years of supervised release, and ordered to pay a $25,000 fine in addition to previously forfeiting approximately $149 million.

Wojciech Chodan (a U.K. citizen and former salesman at KBR’s U.K. subsidiary) was sentenced to 1 year of probation and ordered to pay a $20,000 fine in addition to previously forfeiting approximately $727,000.

The Bonny Island bribery conduct the defendants were charged in was massive in scope and involved a decade-long scheme to bribe Nigerian officials to obtain engineering, procurement and construction contracts at Bonny Island Nigeria valued at more than $6 billion.

As detailed in this previous post, the corporate Bonny Island bribery enforcement actions resulted in approximately $1.6 billion in DOJ/SEC fines and penalties.  The DOJ’s press release announcing the sentences states as follows.  “Today’s prison sentences for Mr. Stanley and Mr. Tesler mark another important step in our prosecution of those responsible for a massive bribery scheme involving engineering, procurement and construction contracts in Nigeria.  These sentences reflect not only the defendants’ illegal acts, but also their substantial cooperation with the government. As a result of this investigation, three individuals have been convicted of FCPA-related crimes, and five companies in four countries have paid substantial penalties and undertaken significant efforts to enhance their compliance programs.  This case shows the importance the department places on putting an end to foreign bribery.”

Two people that probably have not heard of last week’s Bonny Island bribery sentences are Joel Esquenazi and Carlos Rodriguez – two of the defendants in the Haiti Teleco enforcement action.  As noted in this prior post, in October 2011, Esquenazi was sentenced to 15 years in prison and Rodriguez was sentenced to 7 years in prison.

Was the conduct that Esquenazi and Rodriguez engaged in more egregious than the Bonny Island bribery conduct engaged in by Stanley, Tesler, and Chodan?

Not even close.  According to the DOJ, Esquenazi and Rodriguez participated in a scheme in which their employer, Terra Telecommunications Inc. paid $890,000 to shell companies to be used for bribes to Haiti Teleco officials to receive preferred telecommunications rates.

So what did Esquenazi and Rodriguez do to receive a significantly longer sentence than the defendants charged in connection with one of the largest bribery schemes ever under the FCPA?

Esquenazi and Rodriguez tested their innocence.  They exercised their constitutional right to a trial, put the DOJ to its burden of proof, and were convicted by a jury (their appeals are pending).

Professor Ellen Podgor notes in White Collar Innocence:  Irrelevant in the High Stakes Risk Game (here) as follows. “Our existing legal system places the risk of going to trial, and in some cases even being charged with a crime so high, that innocence and guilt no longer become the real considerations;” rather, “maneuvering the system to receive the least onerous consequences may ensure the best result for the accused party, regardless of innocence.”  In the article, Professor Podgor details several stories involving disparate criminal sanctions and states “the real moral of these stories is not whether the punishment was warranted, but rather the appropriateness of the level of risk that one has to take to proceed to trial, and the chilling effect of the high risk caused by the ―trial penalty.”  Podgor notes that “iinnocence becomes irrelevant as the real question becomes whether it is worth the risk of testing an innocence claim.”

Esquenazi and Rodriguez were found guilty by a jury.  However, the greatest factor in their sentences is likely that they tested their innocence.  In contrast, Stanley, Tesler, Chodan pleaded guilty and cooperated (although Tesler and Chodan did fight extradition for several years) and received substantially shorter sentences for engaging in much more egregious conduct.

Is this justice or is this merely knowing how to play a game?  Were Stanley, Tesler, and Chodan sentenced too lightly or were Esquenazi and Rodriguez sentenced too harshly?  What is the message sent to future FCPA individual defendants who might want to test their innocence?

Bonny Island Bribery Statistics

Thursday, January 26th, 2012

In the DOJ’s recent announcement of the Marubeni Corporation enforcement action (see here), Mythili Raman (Principal Deputy Assistant Attorney General) stated as follows.  “With today’s resolution, the department has held accountable all five of the corporations that participated in the massive, decade-long scheme to bribe Nigerian government officials in connection with the so-called Bonny Island project.”  This statement suggests that the Bonny Island enforcement actions may be over save for the sentencing of Albert Stanley (Feb. 23rd), Jeffrey Tesler (Feb. 23rd), and Wojciech Chodan (Feb. 22nd) before Judge Keith Ellison (S.D.Tex.).

If so, the final Bonny Island Bribery statistics are set forth below.  In terms of enforcement agency recoveries the statistics are as follows:  DOJ ($1.3 billion), SEC (400 million), U.K. SFO (11 million).  In addition, the Stanley plea agreement contemplates a $10.8 million in restitution to his former employer.

Some observations.  Of the four TSKJ joint venture partners (KBR, Technip, Samprogetti, and JGC Corp.) only KBR plead guilty to actual criminal charges.  The other three entities (all foreign) resolved alleged FCPA exposure via deferred prosecution agreements.  Of the four joint venture partners, only two (KBR and Technip) were required to engage a compliance monitor.  The two Japanese entities (JGC Corp. and Marubeni Corp.) did not receive a Sentencing Guidelines reduction for cooperation, the other entities did.  Of the five corporate enforcement actions, only two (KBR and Marubeni) involved criminal fine amounts within the guidelines range, the other three corporate enforcement actions involved criminal fines below even the minimum amount suggested by the Guidelines with a range of (30% below the Guidelines range to 20% below the Guidelines range).  Interestingly, JGC Corp., an entity that did not receive cooperation credit, received the “highest” reduction (30%) from the minimum guidelines range.

Because the DOJ’s resolution documents included specific figures for “value of benefit received from improper payments” it is possible to calculate a ratio between the value of benefit received based on improper conduct and the criminal fine amount.  The ratios are as follows.

KBR:  1 to 1.7

Technip: 1 to 1.2

Snamprogetti:  1 to 1.2

JGC Corp. 1 to 1.1

*****

Kellogg Brown & Root LLC / Halliburton Company / KBR Inc. (Feb. 2009)

Attorneys: Paul, Hastings, Janofsky & Walker LLP

DOJ

Entity: Kellogg Brown & Root LLC

Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA  Anti-Bribery Violation (4 Counts)

Resolution Vehicle: Criminal Information and Plea Agreement

Benefit Received From Improper Payments: $235.5 Million

Sentencing Guidelines Range: $376.8 Million – $753.6 Million

Amount of Fine: $402 Million

Monitor: Yes – Three Years

SEC

Entity: Halliburton Company, KBR Inc.

Charges: FCPA Books and Records and Internal Controls Violation (Halliburton Company), Substantive FCPA Anti-Bribery Violation, Aiding and Abetting Halliburton’s FCPA Books and Records and Internal Controls Violation, Knowingly  Falsifying Books and Records and Knowingly Circumventing Internal Controls (KBR  Inc.),

Disgorgement Amount: $177 Million

Technip S.A. (June 2010)

Attorneys: Patton Boggs LLP; Wachtell, Lipton, Rosen & Katz

DOJ

Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violation (1 Count)

Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term – 2 Years)

Value of Benefit Received From Improper Payments: $199 Million

Sentencing Guidelines Range: $318.4 Million – $636.8 Million

Amount of Fine: $240 Million (25% Below Minimum Guidelines Range)

Monitor: Yes – Two Years

SEC

Charges: Substantive FCPA Anti-Bribery Violation, FCPA Books and Records and Internal Controls Violation

Disgorgement Amount: $98 Million

Snamprogetti Netherlands BV, ENI S.p.A (July 2010)

Attorneys: Sullivan & Cromwell LLP

DOJ

Entity: Snamprogetti Netherlands BV

Charges: Conspiracy to Violate the FCPA (1 Count), Aiding and Abetting FCPA Anti-Bribery Violation (1 Count)

Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term 2 Years)

Value of Benefit Received From Improper Payments: $214.3 Million

Sentencing Guidelines Range: $300 Million – $600 Million

Amount of Fine: $240 Million (20% Below Minimum Guidelines Range)

Monitor: No

SEC

Entity: Snamprogetti Netherlands BV, ENI S.p.A.

Charges: Substantive FCPA Anti-Bribery Violation, Knowingly Falsifying Books and Records and Knowingly Circumventing Internal Controls (Snamprogetti Netherlands BV), FCPA Books and Records and Internal Controls Violation (ENI S.p.A.)

Disgorgement Amount: $125 Million

JGC Corporation of Japan (April 2011)

Attorneys: Latham & Watkins

DOJ

Charges: Conspiracy to Violate the FCPA (1 Count), Aiding and Abetting FCPA Anti-Bribery Violation (1 Count)

Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term 2 Years)

Value of Benefit Received From Improper Payments: $195.4 Million.

Sentencing Guidelines Range: $312.6 – $625.2

Amount of Fine: $218.8 Million (30% Below Minimum Guidelines Range)

Monitor: Yes

Marubeni Corporation  (January 2012)

Attorneys: Hughes Hubbard & Reed

DOJ

Charges: Conspiracy to Violate the FCPA (1 Count), Aiding and Abetting FCPA Anti-Bribery Violation (1 Count)

Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term 2 Years)

Value of Benefit Received From Improper Payments: $20 Million – $50 Million

Sentencing Guidelines Range: $54.6 Million – $109.2 Million

Amount of Fine: $54.6 Million

Monitor: Yes.

Albert Jackson Stanley (August 2008)

Attorney: Larry Veselka (Smyser, Kaplan & Veselka LLP)

DOJ

Charges: Conspiracy to Violate the FCPA (1 Count), Conspiracy to Commit Mail and Wire Fraud (1 Count)

Resolution Vehicle: Criminal Information and Plea Agreement

Plea Agreement Contemplates a $10.8 Million Restitution Order (the amount Stanley agreed the victim – his former employer – incurred as a monetary loss because of his conduct)

Plea Agreement Contemplates a Sentence of 84 months (subject to a downward departure for cooperation)

SEC

Charges: Substantive FCPA Anti-Bribery Violation, Knowingly Falsifying Books and Records and Knowingly Circumventing Internal Controls

Permanent Injunction

Jeffrey Tesler (March 2009)

Attorney: Bradley Simon (Simon & Partners LLP)

Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violations (10 Counts)

Resolution Vehicle:  Plea Agreement as to the Conspiracy Charge and One Substantive FCPA Anti-Bribery Violation.

Plea Agreement contemplates a $149 million forfeiture.

Plea Agreement Contemplates a Sentencing Guidelines Range of 10 Years.

Wojciech Chodan (March 2009)

Attorneys:  Kobre Kim LLP

Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violations (10 Counts)

Resolution Vehicle: Plea Agreement as to the Conspiracy Charge.

Plea Agreement Contemplates a $726,885 forfeiture.

Plea Agreement Contemplates a Sentencing Guidelines Range of 5 Years.

*****

In addition to the above U.S. enforcement actions, in February 2011, the U.K. Serious Fraud Office brought an enforcement action against M.W. Kellogg Limited (“MKWL”), the entity that originally formed the TSKJ consortium, in which it paid  “just over £7 million [approximately $11.2 million] in recognition of sums it is due to receive which were generated through the criminal activity of third parties.”  MKWL is currently a wholly-owned subsidiary of KBR.